@LostInParadise Why do you take Nietzsche’s attitude to be “do unto others before they can do unto you”? It seems to me that his cheerful Übermensch would have no use for such maxims. Indeed, the point of the second essay in On the Genealogy of Morals is to diagnose the felt need for cruelty and treat it as a sickness. Thus it is not conflict that Nietzsche mourns the passing of, but rather the sense of purpose that religion gives to people. Nietzsche’s ideal is a creative one, and people require motivation to create. If they lack God, they must find something else—but will they?
This is why I am also not quite convinced that your reading of the Last Man is correct, either. As I read Nietzsche, the Last Man is not interested in science and rationality at all. He enjoys their results, but is not in fact engaged in either pursuit. He is intellectually lazy, and thus has given up the goal of self-mastery (which is what the will to power is actually about, common misinterpretations aside). Content to rest on what others have accomplished, and convinced that there is no God for whom he must strive, the Last Man gives up the creative spirit. He abandons the Nietzschean ideal.
@josie The first use of the phrase actually appears earlier, in section 108 of The Gay Science:
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New struggles. — After Buddha was dead, his shadow was still shown for centuries in a cave—a tremendous, gruesome shadow. God is dead; but given the way of men, there may still be caves for thousands of years in which his shadow will be shown. — And we—we still have to vanquish his shadow, too!
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This first usage foreshadows the ultimate point that Nietzsche wishes to make about morality and the death of God: the type of morality that Nietzsche targets in his work finds its origin in theistic accounts of life and is not sensible in the absence of that foundation, but people continue to cling to an untenable morality because they cannot comprehend the logical consequences of the death of God.
European morality, says Nietzsche, is the shadow of a dead God. It cannot escape its Christian origins. Thus we must find a new ethics—or perhaps a very old ethics (viz., that of the Greek heroes). Only then can we understand what it is to live outside the shadow of God. When we see how Nietzsche’s philosophical views are grounded in his work on Greek philology, we understand him much better.
I agree with you that Nietzsche was not giving mankind a compliment in the passage you quoted (commonly known as “The Madman”), but I’m not quite sure why you call him a “cynical nihilist.” It is true that Nietzsche was influenced by the ancient Greek Cynics, and that your passage makes reference to Diogenes, but that is not what the English word “cynical” refers to anymore. As for being a nihilist, nihilism was what Nietzsche fought against. Though he may have accepted some of the same premises as philosophers like Schopenhauer, he quite explicitly rejected their conclusions.